TOPIC: How to re-open and do well?

I've read here several times before that a person should be very careful when considering re-opening a closed theater. Usually people say that one should definitely find out why the theater closed before.

I went to the town where the closed theater is and spent some time just asking locals at random why they think more people didn't patronize the theater, or why didn't they come more often. It's not a very big town so nearly everyone I asked knew something about the situation or at least had their own opinion.

Two key things showed up in the survey. Remember these are the townspeople's opinions.

-- Dinner and a movie is more of a special event if people drive to the big city many miles away.
-- Better and more dining options in big city.

There were a lot of other issues identified, but I believe they should be correctable. These two items were at the top of the list and are the ones that concern me most. They are also the ones I heard the most often. I can't open numerous restaurants, and I'm not sure exactly how to convince people that an evening out in their own little hometown is worthwhile.

Assume that I correct all the other issues. What would be your recommendations on how to change people's mindset in that town? What kind of promotions would you do?

Sure, the basics of population, number of screens, etc. are highly relevant to any decision about whether to re-open a theater. I had already decided that those things are adequate enough to do a little research.

Oh well, the town is 12,000 with another 2,000 in the surrounding area. The theater has two working screens with a third large original non-functional screen in the rear complete with the original stage. I don't have the seat counts yet. I hope to get inside the theater in about a week to get more information for myself. The realtor doesn't have a lot of details.

I suspect that in the past the front part of the theater was split in two, leaving the original screen and stage unused in the rear. The realtor did comment that the screen in the old space seemed too big for the room. If this is all true, then that old auditorium would likely have to be further divided to keep the proportions correct, unless the space is used for something other than movies.

The nearest competing theater is a 7 screen over 30 miles away, but the one that most people patronize is about 50 miles away. There are three major theaters in that city, and I'm not sure exactly which one is preferred, but I suspect it is the largest and newest one which is a 14 screen with stadium seating.

Everyone I talked to said the closed theater has very nice facilities and a lot of nostalgic charm. Nobody said they drive the 50 miles for stadium seating or digital sound. The most frequent statement as to why people didn't patronize the local theater was that a night out in the big city was just more enjoyable with it's dining options, etc.

The realtor has even suggested that I might want to open a new restaurant inside the theater to help make it more appealing. There may be space, but I'm not sure I want to tackle that in this case. The restaurant would have to be better than just a simple cafe or pizza place. The town has plenty of those. The suggesstion was actually that the town could use a good steak house. Sounds challenging to me and not exactly what I dreamed about. Do you think any steak house operator would want to open a new location in the back of a theater with no real chance of drive-by appeal?

In any case, my original question was what kind of promotions, advertising, etc. can I do to get people to realize that a night out at the local theater can be special too. It may not be the kind of issue that you would normally pay attention to, but if a large number of people are saying it, then it takes on greater importance.

If there are, I would think that the owners would be very interested in your survey results.

Is there a Chamber of Commerce or retail merchants group?

It would be a great opportunity for the theatre owner, the restaurant owners and the Chamber of Commerce/retail group to get together and create a promotion to sell the locals on the benefits of staying in town for their nights out.

As the theatre owner, you would need to make your place nicer then what they would experience out of town, and the restaurant owners would have to do the same.

If you can't get the locals to stay, maybe you can get the big city folk to come to your town for their nights out. Does the town have some special charm worth promoting? If so use it.

The grass is always greener on the other side of the fence. Keep in mind that you are on the other side from the larger population base. Take advantage of it.

[This message has been edited by RoxyVaudeville (edited January 30, 2006).]

Does the population work in the community or commute to the bigger city? How long has the theater been closed? Is there parking nearby?

I personally would not want to put a restaurant in my theatre. I want to sell popcorn and soda.

There aren't very many restaurants in my small towns and no upscale ones. My competition is also 50 miles away, where there are numerous nice restaurants. Sure sometimes my patrons go there for a movie, but it isn't a weekly occurance. They sometimes come back and complain about the dirty auditoriums, unruly kids, high concession and admission prices, small auditoriums, sound problems, freezing auditoriums, etc.

I'd say you would have to make that theatre nice, clean, and comfortable with good sound and picture quality and with strict rules of behavior. Put on a nice presentation and personalize it to your community. That way, they might identify it as their "community theater" and give it their support.

If you do decide to go ahead with it, you might try a free show one weekend. Try to get some sponsors or just cover it yourself. That might get them in the door so they can see how nice and friendly it is and that your prices are reasonable.

With the dining. My wife loves dining. She is very fussy. Will only go to some coffee shops and she won't go to any rundown coffee shops. With cinemas she has to go to an upmarket cinema with comfortable seats. When you buy an older building I think you have to be aware that some customers are kind of stuck up. The second thing is that the town may not be in the habit of going to the movies. I believe that you can promote the movie and try to get them more involved and wanting to see movies.
Also some social promotion I think would be the best way to go. Movies are a social atmosphere. People want to see friends and talk to friends. A small town loves seeing other people in the small town. They like the country atmosphere. You could promote a social atmosphere and try to have them not only to see a movie but to socialise afterwards. If there is social interaction and they see friends then they would prefer the local cinema over driving 50 miles to a busy complex. You could do meet your streets night or meet your suburb nights or and have a different street every night.

They mostly have fast food and hometown cafe kind of places. I was told there is one nice new Italian restaurant. They also have a Chinese buffet, a Golden Corral (another buffet place with steak), and several Mexican restaurants, a barbecue joint, sandwich shops, chicken places, a pizza parlor, and some "family" restaurants. I think this selection would be good enough for me, but I suppose most of it is not considered "nice" by the locals based on their comments. Most of these places are fairly low end dining. I don't know if there are any mid-range to upscale restaurants in the bunch. It seems to me that a lot of people favor the national corporate chains these days, like Chili's, Ruby Tuesdays, TGI Fridays, Olive Garden, and similar places. There certainly aren't any of those in town.

Is there a Chamber of Commerce or retail merchants group?

Yes. They were the first ones I called when I saw the theater was for sale. I wanted to get their ideas on why the theater didn't do well. They essentially said it was due to poor management. I haven't spoken to them yet about these other comments I've been hearing.

Does the town have some special charm worth promoting?

I'm not aware of anything that would draw the big city folks out. The nostalgic theater may be about the best thing the town has going... if it were going. Maybe some folks might like to come out and see it, but it's not a palace. It's just in good restored condition and has a similar style to that of the 1950's when it was built. I might be able to play that up.

Does the population work in the community or commute to the bigger city?

I suppose there is some of both. However I suspect that they mostly work locally because the average commute time is only 11 minutes compared to a 26 minute national average. Anybody commuting to the bigger city would have a commute of 45 to 60 minutes.

How long has the theater been closed?

This time, 3 to 4 months. It has closed twice. The first time the management even tried being a dollar discount house. I don't know when that was, or how long it was closed that time. Then the last owner bought it, spruced it up and opened for one year before giving up. From what I've been told, he did a lot of things wrong, like no newspaper advertising or phone recordings (used flyers at local businesses and institutions instead). Anyway, it has been for sale since October.

Is there parking nearby?

It is in the old downtown area. There seems to be plenty of onstreet parking in the area with angle spaces on both sides of the street, although there is no large centralized parking lot. Some people might have to walk a block or two on a busy night. It's right by the courthouse and the police station, so hopefully everyone would feel secure enough.

I like the suggestions about promoting as the community's theater and also about trying to find a way to create a social experience for the locals. I'm sure that we would have to ensure the basics are done right too... good presentation, clean, etc. I'll definitely want to play up the nostalgic charm in an effort to appeal not only to the locals, but also to the city dwellers.

I hope I can get the chamber of commerce and area restaurants involved too. A free movie is sure to attract plenty of attention as well. I wonder if it would be ok to use something a little older as the free movie, maybe a classic? That way the expense would be lower. (However, one of the complaints I heard was that there weren't enough films playing day and date. Also I don't have a clue about what equipment is in the booth until I tour it.) Would you have to pay the film distributor a percentage of what they would have received if admission was charged, or would there be a flat fee for a free show?

Thanks for all the great input everyone. Keep it coming. Anyone have any more suggestions or comments?

[This message has been edited by lionheart (edited January 30, 2006).]

Yes, I think a bigger population and more screens would work better too. Seems like I remember something from Economics class called economy of scale. Definition: The decrease in unit manufacturing cost that is due to mass production. I wish I could own a big multiplex, but I don't have the money it would take to even get a loan for that.

On the other hand, I've noticed that sometimes small businesses make nearly as much money as larger ones, especially when the startup costs are lower. They surely have potential for fewer headaches anyhow. I think 3 screens would work well with 14,000 people. If people attend movies 5 times a year on average, that means the market could generate about 70,000 admits per year.

If I only have half that many show up, that would be 35,000. If my average admission price will be at least $5.00 then my part of admissions should be about $2.50. And I will hope to average at least $2.00 per cap. That is $4.50 per customer. Multiply that by 35,000 and there will be $157,500 before other expenses and taxes. I'm projecting this location will generate expenses of $10,400 per month as a conservatively high estimate (I hope). This includes a salary for me. Anyhow for a year, the expenses would be $124,800. That leaves $32,700 to put back in the business or to make up for my errors in calculating expenses.

So, 14,000 should be ok. It shouldn't be any worse than big companies putting 8 screen theaters in towns of 20,000 in this region.

My town has a population of 14,000. We have a triple cinema doing very nicely with that size. We do have a little competition from the local RAAF base cinema, but as its only open weekends and only runs second run films, its not too bad. Our nearest competitor that is open the same as us is 60km away.
some promotions worth concidering are:
*Give away tickets via the local radio station. You can specify one screening or just a gift voucher, its up to you.
*Have a loyalty club with cheap tickets and specials every month for club members.
* have a buy one get one free offer with your advertisment
* Try a see 3 films this month and get a 4th ticket free
* give out leaflets on the streets with your screening times and a voucher for a free or half price popcorn or drink
* do a letterbox drop with your screening times and a free or half price ticket
* have a charity screening with all proceeds going to cancer research or the local hospital, be sure to get the local radio, papers and Tv stations involved.
* Offer wine and supper after the shows on Friday/ saturdays nights (you would have a special price to cover it)

I think in the case of your cinema, you need to work out who it is that you want to bring in . Who is your target audience? do you want older people, young people, families, kids?? Once you decide that it should be easier to work your marketing campaigne(sp?) to them. just concentrate on one level, don't try to cater to everyone or you will fail

Once you get people in the cinema and they have a great time, they will come back. The hardest part is getting them there in the first place, so you have to keep it in their heads day after day, by promotions and specials. You may not make a fortune at first, but if you can get them in and keep them coming back, you will be comfortable

Another thing to do that I just thought of is to re-poll the people of the street and ask them what would entice them to use that cinema should it open. You could try an A B C answer system where you provide the answers such as A-comfortable seats, B cheap tickets or C first run films, but personally I beleive it is more beneficial to just ask the question and see what they come up with. It may be worth your while to have some free coffee vouchers on hand to give them as a thankyou for answering your question. That gives them more incentive to think of a real answer rather than just saying something to get rid of the pesky person asking questions. Im sure you would have a coffee place nearby that could help you out with vouchers,,maybe even give you half price vouchers to give away..no harm in asking!

I thought I would finally give an update on this situation for any who might be interested. I just didn't have the heart for it until now.

I went and looked at this theater a few weeks ago. After looking for myself, I decided that I would be in over my head to take on such a project. I would not have been satisfied to just keep the property a twin. I wanted a 3 screen.

What I originally guessed was correct. The theater was built as a large single screen, probably seating 800 to 1000 people. Later it was twinned, using only the rear half of the old theater. The front part (or is it the rear?) with small stage and original screen area remains essentially unused except as a very large, disorganized storage area full of junk. I'm not sure about the roof in there either. There were lots of spots on the ceiling.

I didn't like the look of how the place was twinned. To add a third screen in the unused space would take a lot of effort. It would end up with a separate booth and new hallways (which would narrow the existing 2 auditoriums). They currently seat about 210 and 225 and are nearly the same size, and one of them has an old crying room not in service. The emergency exit routes pass through the old unused screen area, so hallways would have to be built down the sides of that area too. That might be ok since that room is probably nearly square, and might need to be narrowed. It might even be possible to put two screens in that old space and make it a 4 screen, but of course everything costs plenty of money.

When I crunched all the numbers before going to see it, I only allowed about $25,000 for additional refurbishment of the theater. (It was advertised as if that old auditorium just needed seats, or at least that was my interpretation.) I decided that figure would be much higher and I wasn't comfortable with where it was going. They were asking $250,000 as it was. After calculating the market potential for the area. Even at the purchase price plus a 25k additional refurbishment, I felt that I needed to pull at least a 60% share of the market to make it worthwhile. Since many people in the town are in the habit of traveling to the bigger city 50 miles away for their outings, and since it only has a few screens, I didn't feel comfortable assuming any more market share to cover greater expense. I try to be conservative with numbers.

I also had determined that for this theater to be workable, it had to improve the film selection and likely it would have to go day and date. Several people mentioned that was one reason they thought it didn't do well. Most major films didn't play there until 3 or 4 weeks out, if they played there at all, and people just went to the city to see them and didn't wait. This means that the costs of running the theater could not be minimized to make it work. I think that is what happened to the last owner. His plan must have been to run the theater at as low a cost as possible, assuming that his customers would wait to watch films in their hometown. Seems like that didn't work in this town. I know it does work in other places, but probably not there.

As for the rest of the facility, it is fine. Some parts, such as the lobby and concession area, are very nice. The existing auditoriums are ok. The seats were all replaced about a year ago, although they don't have cup holders. They are nothing fancy, but probably are fine for the 1950's experience that the owner seemed to be going for.

The equipment in the booth seemed ok too, based on my limited knowledge. Equipment there included Century projectors, Strong Lumex lamphouses, a Christie platter, automation, and what appeared to be digital sound equipment, along with other stuff I won't name.

The loft apartment was above the lobby and had windows overlooking the marquee with a view of the town square. It was very industrial and not to our tastes. It would have needed more work to make it a place I'd want to raise my kids in. However, I could see other people thinking it's kind of cool. They had knocked a hole in the wall of the apartment to give access to the booth. Convenient for a dedicated owner, I suppose. The restrooms looked much like smaller versions of the ones down in the theater, so the layout was odd and the fixtures out of place for an apartment (unless you like a full length urinal in your apartment and shower water draining through the floor drain in the middle of the room). Like I said, very industrial and not for everyone.

I guess what I'm saying here is that if anyone else is interested in a twin in a town with 12,000 people and about 2000 more in the trade area, I know where you can find one for the advertised price of $250,000. If you want future potential to add 1 or 2 more screens, it might be there too. I'm not sure if the numbers work very well, but I'll leave that to someone else, because I'm no longer interested. The theater has a website at www.vernonplaza.com where you can find out more about it. Please direct your questions to the realtor listed there. I'm not trying to sell it, she is.

I think this was the last time I'll be looking into theater ownership, at least for a long time. I wish you all well. I think I'll take Roxy's advice posted not long ago and stay out of this industry which is undergoing such tremendous pains in a time of uncertainty. However, good luck to all of you that continue to seek to make all our lives a little brighter by casting the magic light on the big screen.

I stumbled across this thread. The Vernon appears to be open and hanging on. Wikipedia says "in late 2006, author Mark Finn and his wife Cathy Day, along with Stephen Ray and spouse, Sahar Arafat-Ray, acquired and began operation of the old theater."

The Vernon Website says the theater is open Fridays through Mondays.

A recent article says, "Instead of being the main attraction of Vernon, they're just not getting interest from the community. They expected at least 1200 patrons a year. Instead, they only see about 600.

"Finn says, 'What we really need is… in the end community support. The more people the merrier. That's the bottom line when it comes to this. People in the doors, filling the seats… enjoying the movie.'

"Finn and his wife Kathy have big plans for the Theater, but the plans require revenue."

A 2007 article said this: "Author Mark Finn and his wife Cathy Day (recently bought) the old movie house after leaving their successful jobs in Austin.

"Finn, author of the acclaimed Robert E. Howard biography Blood & Thunder, walked away from his day job as a manager at BookPeople, the largest independent bookstore in Texas. After 12 years, Day gave up her career as an elementary special-education teacher. They agreed that it was time. 'We've always wanted to do something like this, and the opportunity presented itself,' Finn says.

"In late 2006, the couple purchased the legendary Vernon Plaza Theatre, which first opened in 1953. Over the next 50 years and several owners, the movie house, the first theatre in Texas built to show 3-D movies, fell into disrepair and neglect. 'The original framework was still there, and the previous owner had upgraded the [film] equipment, so it wasn't all that bad, but it still needs some work,' Finn says. 'Painting, things like that.'

"Originally a cavernous 1,000-seat theatre, a previous owner divided the downtown cinema into three separate ones. In February, Finn and Day opened two screens showing first-run movies, to the delight of the locals. Finn detailed the plans. 'Once we acquire digital equipment, the third screen will show smaller pics, arthouse films and the like. Also, the space could be used for private screenings and parties. Since this theatre will actually have a working stage, it will be available for dramatic productions.'

The # 1 reason people go to the movies is to SEE THE MOVIE. In a town of 12000 people you should do a hell of a lot more business than 1200 or 600! What movies were they playing would be my # 1 question.